"This budget takes us through a turning point and confirms our commitment to a common sense principle of finance, often ignored, that we should spend no more than we take in," Corzine said.
In all, the budget has $2.9 billion in cuts, including money for hospitals, nursing homes, municipalities, property tax rebates and colleges. It increases money for public schools.
It denies a funding increase to nonprofits who care for the disabled, but includes money to boost the state's unemployment benefits fund.
It extends a tax on public utilities but has no money for pet projects that typically have been added by legislators, and calls for cutting up to 3,000 state jobs and abolishing the state commerce and personnel departments.
However, it creates a special new fund to help pay principal and interest on state debt.
Corzine said the cuts "are painful and bring no pleasure of applause."
"The cuts do, however, make clear that fiscal and tax stability for New Jersey's citizens is possible," he said.
Corzine also signed an order requiring governors to ensure state spending matches state revenues.
Corzine's fellow Democrats who control the Legislature said the cuts are painful but necessary during tough fiscal times. Senate Budget Chairwoman Barbara Buono, D-Middlesex, said the budget wasn't balanced with gimmicks that helped create New Jersey's chronic fiscal woes.
"Instead, this budget was balanced by cuts," Buono said. "Cuts that were painful and, in some cases, downright repugnant, but they were not indiscriminate and the Legislature restored, where we could, some of the most onerous ones."
Buono noted lawmakers eased cuts to municipalities, hospitals and nursing homes, axed a proposed income limit on a county college scholarship and new fees for Medicaid patients and added money to expand health insurance to more poor parents and children.
Republicans contend the budget will drive up what are already the nation's highest property taxes at $6,800 on average per home. They also contend the plan could have done more.
Corzine earlier this year proposed significantly increasing highway tolls to pay state debt and fund transportation, but the plan lacked public and legislative support. Corzine has said he will unveil a revised plan in the coming weeks, with the state facing an Oct. 1 federal deadline to come up with money for a new Hudson River rail tunnel.
Republicans proposed a series of budget cuts that would have diverted $500 million to transportation work while neither increasing tolls nor the gas tax, but Corzine dismissed their plan.
"A governor who wants to do something about high gas prices and the rising cost of living in New Jersey would line item veto at least $500 million from the budget so we don't need to raise the gas tax, hike tolls or waste more of the public's money preparing yet another version of a monetization scheme the public has soundly rejected," said Sen. Jennifer Beck, R-Monmouth.
Liberal-leaning groups also decried the budget. Eva Bonime, coordinator of the Better Choices Budget Campaign, which includes community, labor, housing, health and environmental groups, said the budget is a disservice. The coalition proposed avoiding cuts by increasing corporate taxes and income taxes on the wealthy.
"The failure to make needed investments in vital services like higher education, roads and health care will reduce the quality of life for all New Jersey residents," Bonime said. "Cuts to municipal aid will drive up local property taxes."
